Strange though it might sound, given the proverbially lamentable state of Russia’s roads in general, the country will soon start building toll roads. The first will be opened along the approaches to Moscow and other major cities. The Transport Ministry is still only examining the possibility of building toll roads to other cities, but the Moscow Oblast authorities have already decided on the construction of a toll road on their territory.
The Moscow Oblast government approved a decision to build and operate a toll road linking the Moscow Ring Road and the oblast town of Noginsk at the end of summer. Construction work will begin in 2004 at the earliest and last four to five years. The project is to be financed by private investment, with investors expected to put $202 million into the road.
The 47.8 kilometer road will bypass the towns of Lyubertsy, Reutovo, Balashikha, Zheleznodorozhny, Elektrougly and Obukhovo. The aim is to relieve traffic on the Novosovikhinskoye and Yegoryevskoye highways and the M7 Volga motorway.
The second road, approved at the beginning of autumn, will link Moscow to the Moscow Oblast town of Odintsovo. Construction will begin at the end of 2004 and last four to five years. This road should relieve traffic on the Mozhaisk highway. No information is given about what the project will cost, but the Moscow Oblast authorities say that an investor has already been found. The oblast authorities have plans to build another 10 toll roads over the coming years, including a road to run alongside the Yaroslavl highway and an alternative road to Sheremetyevo airport.
Plans to build toll roads around other cities are still only at the discussion stage. The state road agency, Rosavtodor, is to draw up proposals for building 15-20 kilometer toll-road stretches around major cities by the end of September.
According to Igor Slyunyayev, the first deputy transport minister, the European Bank for Reconstruction and Development has shown an interest in financing the construction of toll roads. He says that the bank would be willing to loan money for the projects without requiring a state guarantee.
The proposed fee scale for the toll roads would range from 60 kopecks to three rubles per kilometer. Payment will depend on the type of vehicle, time of day and day of week. Transport Ministry officials say that everyone who uses the roads will have to pay, including state officials. The only exemptions will be for emergency services such as ambulances and the police. There will be toll-collection booths every 10 kilometers. The safety systems to be used on the roads will be up to world standards. There are also plans to add additional large road signs that drivers will be able to see from a great distance no matter the time of day. There will also be security systems and emergency-call services and services for motorists. The toll roads will have a minimum of traffic lights and traffic-police posts.
The idea of building toll roads was already being discussed when Boris Yeltsin was president. During the reconstruction work on Rublyovskoye Shosse, there were plans to build a toll road around Odintsovo, but the project was never carried out because the government’s expert council decided that it would cost too much to build the road and reconstruct the highway at the same time. Local residents also opposed the project and voted against it in a referendum.
In 1999, discussion began on another project to build a toll road in the direction of the town of Klin, bypassing Solnechnogorsk. This road, which would have been 300 kilometers long, was estimated to have a cost of around $1 billion. But this project also went nowhere.
In 2001, rumors began flying in Moscow that the authorities were going to turn the Moscow Ring Road into a toll road. At that time, Moscow City Duma Deputy Irina Rukina was promoting the idea of collecting a toll for driving into Moscow, but these projects never got off the drawing board.
Today, the toll-road idea has gotten a second wind. This is partly due to the abolition of the road tax at the beginning of this year that all car owners had paid previously. The tax went to the road fund, which financed the construction of all the federal roads and allocated money to the regions for the construction of roads there.
The new Tax Code abolished both the road fund and the taxes it received, and this put the authorities in the problem of deciding where to get money to build new roads and maintain existing ones.
Toll roads now look like a way to collect the necessary money. The Moscow Ring Road-Noginsk toll road alone is expected to bring in around 6 billion rubles to the budget. The road will operate as a toll road only until it has paid off its costs – a time estimated at 15-20 years. Then, it will become an ordinary road.
But the question of how long the project will take to pay for itself is a vital one. Business plans for projects like these in Russia usually make a big mistake when it comes to calculating the traffic the road will carry: Investors expect a certain number of cars per day, but, in reality, the amount of traffic is usually less.
"There are a lot of projects like this in Russia," said Alexei Rodionov, of the Urban Economics Institute. "There was a toll road in Voronezh Oblast, and then there was the road from Sheremetyevo. For all these projects, traffic has been the critical moment. No one drove on toll roads. First, they made exemptions for the police and ambulance services, then for deputies. Finally, they just became ordinary free roads."
The trap for building toll roads in Russia lies in legislation that forbids collecting fees for driving on a road if the driver has no choice. This means that toll roads have to follow the route of an already existing free road. Along with Russians’ unwillingness to pay for driving on a road, this makes the projects a failure, as no one wants to use them.
The Russian government knows the mentality of the people, however, and has found another source of financing for roads.
Deputy Prime Minister Vladimir Yakovlev told The Russia Journal that he has instructed the Transport Ministry together with the Economic Development and Trade, Finance, Tax and Justice Ministries to draw up proposals for introducing transit fees on roads for foreign transporters. Yakovlev would not say what kind of deadline he had for these proposals, but said that the scheme could ensure that the budget receive "significant hard-currency revenues." The proposals concern above all use of Russia’s two international transport corridors.
The first – the Number Two West-East corridor – runs from Berlin to Warsaw and on through Minsk, Smolensk and Moscow to Siberia and the Far East, with branches running off into China and Mongolia.
The second, the Number Nine North-South corridor, runs from the Scandinavian countries through St. Petersburg and Moscow and down to the Caspian Sea and into Iran.
None of the international transport companies really use these roads. But Russian transporters supposedly made $3 billion from them last year. According to official statistics, the share of German transporters in traffic on the roads is 5.4 percent, French 2 percent, Italian 3 percent, Spanish 0.4 percent and Belgian 0.6 percent. In total, European transporters account for no more than 12 percent of the freight-transport traffic. In 2002, 19 million tons of freight were carried along Russian roads.
"There is transit-freight potential of 100 million tons a year," Yakovlev said. "We have to settle the question about introducing a transit fee now, especially as many EU countries have already introduced this practice and make active use of it as a source of financing. Russia is lagging behind in this respect."
But it is clear that, given the poor state of these roads and the arbitrariness of customs officials and other supervisory bodies, the few transporters using them will protest vigorously any attempt to make them pay.
"We are fully aware of this problem," Yakovlev said. "That is why we are not talking of introducing this fee immediately. First, we need to get these transport corridors into a normal state. If we charge a fee for a service, we first need to be able to provide the service properly." To do this, Yakovlev has also instructed the Transport Ministry to come up with a plan on modernizing the roads that would include installing monitoring systems, improving surfaces, bringing some order to road signs and increasing the roads’ capacity.